📷 Image Credits: The Economic Times
The board of Zee Entertainment Enterprises Limited (ZEEL) has given its in-principle approval to raise funds up to Rs.2,000 crore via issuance of shares or eligible securities, the company said in a filing. This move comes after the collapse of the $10 billion Sony merger in January, which led to cost-cutting measures and a 15% reduction in the company’s workforce.
Following Sony’s withdrawal from the merger deal, Zee Entertainment is now focused on enhancing its financial position by seeking funds through equity shares or eligible securities. The board’s decision to approve fundraising of Rs.2,000 crore has instilled confidence in the market, as reflected in the 5% rise in Zee shares to Rs.153.75 on the BSE.
The fundraising plan is not limited to a single mode and may include private placement, qualified institutions placement, or preferential issue. This strategic move aims to provide the company with the necessary flexibility to navigate the evolving media landscape and pursue growth opportunities.
Moreover, the company’s restructuring efforts have shown positive results, with a reported profit of Rs.13.35 crore in the recent fourth quarter, marking a significant turnaround from the previous year’s loss. The increase in domestic advertising revenue, driven by strong demand and increased spending by FMCG clients, has contributed to the improved financial performance.
In addition to financial measures, Zee Entertainment’s board is closely monitoring the business model and performance targets set by the Managing Director & CEO. The roadmap outlined by the CEO focuses on enhancing the efficiency and performance of each business segment to achieve higher EBITDA.
The approval for fundraising amidst a challenging market environment signals the company’s resilience and commitment to strengthening its position in the industry. With a strategic approach to financial management and operational efficiency, Zee Entertainment is poised to leverage growth opportunities and navigate the dynamic media landscape in India.
